Since my past two losses were from GBP/USD, I’m going to go with EUR/USD this time. As you can see, the pair has just broken a major rising trend line, and with price testing the area between the 50.0% and 61.8% Fibonacci retracement levels, I think the price could start moving down again.
Normally, I wait for candlestick patterns for confirmation but given how price has stalled at the 1.3000 major psychological level and the oversold Stochastic, I decided to jump in already. What’s more, is that the pair seems to be in the process of forming the right shoulder of a big head and shoulders pattern.
On the fundamental side of things, I think that the upcoming FOMC Statement could turn out to be bullish for the dollar. From what I’ve read, most market participants are anticipating the Fed to announce another stimulus program to replace Operation Twist which is due to expire at the end of the month.
The consensus seems to be for a liquidity plan amounting to 45 billion USD. However, I think that there’s a good chance for Ben Bernanke to announce a package of a smaller scale given the recent improvements in the economy.
So, there ya go! That’s my take on the market. To recap, my plan is to:
Sell at market (1.3005). Stop loss at 1.3080, PT1 at 1.2900, PT2 yet to be determine. I will bet 1% of my account. Risk disclosure.
Keep your fingers crossed for me, will ya?
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